Thoughts on Kabila and the DRC (Congo)

As a number of senior and junior mining companies seek to operate in potentially lucrative African jurisdictions, investors are becoming very interested in African politics. I'm going to attempt to give a quick overview of the current situation in the Congo.

Recently Congo held its first multi-party elections since independence in 1960. After this Joseph Kabila took 45% of the votes and his main opponent Jean-Pierre Bemba took 20%. That was the origin of a two-day fight between the two factions from August 20, 2006 in the streets of the capital, Kinshasa Sixteen people died before police and the UN mission, MONUC, took control of the city.

A second round of elections between the two leading candidates, Kabila and Bemba, was held on October 29 2006. Rioters destroyed polling stations in Congo's east and electoral officials organized a revolt over burned ballots in the north. Despite that, the presidential vote was called a success. Both Kabila and Bemba assured that they would respect the result,but Bemba's militants had begun riots in opposition of the decision by the Supreme Court that will legitimise Kabila's 58%-42% winning result on the run-off.Bemba has argued for his supporters to stop fighting the government and vowed to take his seat as an official opposition leader.

Since the mid-eighty's the DRC economy has struggled due to its instability. What was never in question was the vast wealth in resources. In the past year, the IMF and the World Bank have been working closely with Kabila to initiate economic reforms. Kabila has been viewed as a pro-business president and is intent on luring more foreign capital back into the DRC.

The Fraser institute recently did a survey whereby mining executives rating the investment climate around the world. It was agreed that "attractive geology does not guarantee mining investment if a region's policies are bad." In Africa, South Africa gets the executives' best rating, followed by Ghana and Congo Kinshasa (DRC). Investors are more insecure on Zimbabwe, mostly due to political instability.